EU settlement ban casts shadow over Palestinian industry in the West Bank

It’s early morning in the middle of the week and the Barkan Industrial Park in the West Bank opens the day as always. The thousands of workers in dozens of factories - half Israelis and half Palestinians - arrive for work. Some come from the other side of the Green Line or nearby settlements, some from nearby villages and towns such as Nablus or Salfit.

By 9:30 A.M. the machinery is chugging along, an ordinary day. But hovering in the air are the European Union’s new guidelines that limit cooperation with the settlements, amid the calls from Europe to boycott Israeli products made over the Green Line.

Still, it seems business has never been better. The industrial park, established in 1982 and covering 1,300 dunams (about 325 acres), has expanded greatly.

"The European Union’s latest decision has no effect on us at all," says Gershon Mesika, the head of the Shomron Regional Council, where Barkan is based. “There are 140 dunams that we developed and rented out for NIS 450,000 per dunam. Not one square centimeter is available. If I had another 1,000 dunams, I’d rent them out, too.”

So yes, it’s business as usual for Israeli firms in the West Bank. The new guidelines, which go into effect at the start of next year, affect mostly government projects, research-and-development grants, and financing.

The problem is different. Alongside the new guidelines, the European Commission is crafting rules that will recommend that the EU’s 28 member states label products made in the settlements. Even before that, European stores could be required to boycott goods manufactured over the Green Line. The first signs of such a move started two weeks ago.

The Dutch government recommended in March that importers label products made in the settlements. Two weeks ago, the Dutch arm of German supermarket chain Aldi and two Dutch supermarket chains decided to boycott goods made over the Green Line. A few days before that a Dutch newspaper reported that branches of two supermarket chains would boycott goods from the West Bank.

The logic behind the European - and Israeli - calls for a boycott are clear: Economic sanctions would hurt Israel without violence and help end the occupation. After all, the sanctions on South Africa brought apartheid down.

Such a boycott could seriously sting the factories in Barkan; up to 80 percent of the plants’ products are exported. So even if business at Barkan is better than ever, an atmosphere of worry holds sway among the owners and employees, Israelis and Palestinians.

Unilever and Mul-T-Lock left

These fears are not unfounded. Last year Unilever moved its Bagel-Bagel factory to Safed in light of the decision by South Africa to label products made in the settlements. Sweden’s Mul-T-Lock followed suit and moved its factory to Yavneh.

"If Europe boycotts me, the factory will collapse," says Yehuda Cohen, the CEO of Lipski, a maker of sanitation and plumbing products. Cohen's plant employs 90 workers today, half Israelis and half Palestinians. Cohen is proud of this - he calls his factory "a bridge between peoples" and shows off pictures of employees on trips together.

With its 120 industrial plants, Barkan is one of 14 industrial zones operating in the West Bank and employing nearly 20,000 people, half of them Palestinians.

In Samaria alone, the northern part of the West Bank, around 12,000 Palestinians are employed, Mesika says. The law requires that the companies pay minimum wage, in addition to benefits such as vacation pay and pension deductions.

“The average monthly salary in the Palestinian Authority is between NIS 1,500 and 2,000,” says Cohen. “Here our employees begin with a minimum salary and can earn up to NIS 9,000 a month, more than three times the average salary in the PA. They work shoulder to shoulder with Israelis, so this is a chance for Israelis and Palestinians to work together, to talk to one another, to trust one another. We’re an industry that manufactures peace products.”

Cohen asks, “Do they [the EU] understand how many Palestinians will lose their jobs if we leave? Do they know how many people will become destitute? What will happen to them? Will the European Union provide them with unemployment insurance?”

Amiram Guy acquired Shamir Salads, Israel’s third largest salad manufacturer, in 2006. “I still don’t know what the repercussions of the European Union’s decision will be,” he says. “When Bagel-Bagel left, 150 Palestinians lost their jobs and 1,500 people were deprived of their livelihoods. When Mul-T-Lock closed its doors, another 200 employees were sent home. Did this help anyone? What did they accomplish by all this? They increased the number of hungry people.”

Cohen takes a similar view. “Look, it would be great if people came here and saw how people are working side by side,” he says. “They [the EU] want peace? So do I. But why should the livelihood of thousands of people be impaired along the way? Unfortunately, people in Europe don’t understand the ramifications of their declaration ‘We won’t buy products from the settlements.’”

Update: Several days later, the three chains denied reports of a boycott. A spokesman for one of the Dutch companies, Hoogvliet, said the company did not boycott products made in the settlements, but that it simply was not selling any such products at the moment. An Aldi spokesman said that source of the erroneous report in the Dutch newspaper was based on inaccurate information the company had given the paper. In any event, all three chains have stressed that they do not sell products made in the territories, apparently for reasons unconnected to their place of manufacture.